What the heck is that!
What could that possibly mean?
An inverted yield curve indicates a recession. When the curve goes flat, with little difference between the long and short yield on T-bills (ZIRP), flat (or slow) economic growth is expected. Keeping interest rates low (near zero) means there is no expectation for all that wealth accumulated at the top to be turned into capital and trickle down.
Right-wing reactionaries say it all looks flat because tax rates are too high and there is too much regulation. Reverse that, and we will have inflation–the measure the Fed says will trigger rising interest rates and a normal yield curve.
This is what market economists call a long-term, slow-growth economic outlook. (Like I’ve been telling you, it’s not stagflation, exactly.) The inflation component is not an income-adjustment measure at present value.
With the absence of inflation, described as “low inflation,” adjustment comes in the form of anti-deflation, but we do not admit that the trend is deflationary. It is “secular stagnation.”
(The similarity with the description of the commodity fetish is striking…kind of funny, really. It’s like we’ve found religion to know what the real presence of risk actually is, by means of “secular stagnation.” It is also a lot like the absurdist play, “Waiting for Godot.” We’re waiting for something to happen by reacting to, for example, the yield curve, to protect the sacred cow–the commodity fetish–secularly determined by means of our own derivative devices.)
Hmmm…yes…well, if what right-wing reactionaries say we need to do is what we are waiting for, it should already be here–NOW; stagnant, deflated, waiting for the proper reaction, existing on demand, right?
The Fed left rates unchanged, which means (like I’ve been telling you) there is still a lot of bull, left in the market.